What interest rate does a bank pay when it borrows reserves from the Fed?
A) The discount rate.
B) The prime rate.
C) The federal funds rate.
D) The required reserve rate.

Name: What interest rate does a bank pay when it borrows reserves from the Fed? A) The discount rate. B) The prime rate. C) The federal funds rate. D) The required reserve rate.
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Question

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When a bank borrows reserves from the Fed, it pays the discount rate, which is set by the Fed.

What Interest Rate Does a Bank Pay When It Borrows